Almost all of the banking stocks in which Ruffer invest are members of the UN Net Zero Banking Alliance.1 Signatory banks are expected to commit to decarbonisation through credible action plans, short and long-term emission reduction targets and frequent reporting on progress. Crucially, it requires banks not just to assess their own operations, but those of the businesses they finance and invest in.
This initiative ought to spark much needed progress, as we have witnessed first hand when meeting and investing in small, green infrastructure operators, access to traditional avenues of finance has been tricky to come by. The tide, however, is beginning to turn.
Barclays, for example, is aiming to facilitate over £100bn in green financing by 2030, supporting the transition by providing green loans, green bonds and project finance focused on renewables, energy efficiency and sustainable transport. Barclays has also created an accelerator program which seeks to invest £175m of equity capital by 2025 in innovative sustainability-related start-ups. Their investment has helped businesses develop scalable solutions in areas such as ecological concrete, sustainable fashion and vertical farming (which uses 99% less land and 97% less water than traditional farming, with 300x more yield).2 But social and environmental sustainability requires more than innovation, it requires broad-based change across industries and supply chains. In this regard, Barclays has announced a collaboration with one of the leading energy, water and carbon reduction specialists, to help its corporate clients reduce emissions and pivot to more sustainable practices.